Th T
T e ECJCC ’s’ rulilni g fuff rthtt er devevv lops tht e concepe t of a «sini gle economic unit»tt tht at allllowsww attrtt ir bii utit on of lillaii biliiilltytt foff r antit -competitt titt vevv conduct inii cacc ses ini -vo
vv lvivv nii g complexee corprr orarr tet strt ucturer s whww ererr tht e possss ibii iliiltyt of exee ercr isii ini g a decisii ivev inii flff uence cacc nnot be alwaww ya syy detett rmrr inii ed on thtt e basisii of tht e contrt orr l-lillnii g sharer holdid nii gsgg . ThTT e exee ix sii tett nce of a «sini gle eco-nomic unit»t cacc n be inii feff rrrr er d on thtt e basisii of a «con-sisii tet nt bodyd of evivv dence» rerr quirii irr ni g cac se-byb -yy cacc se assss essss ment.
(1) Facts and Procedure (a) Background to the Appeal
The litigation in question originates from the
Commission’s’ Plasterboard decision1
against BPB PLC, Gebrüder Knauf Westdeutsche Gipswerke KG (now Knauf Gips), Société Lafarge
SA and Gyproc Benelux NV.VV2The Commission
con-cluded that the undertakings had infringed Art-icle 81(1) EC (now ArtArt-icle 101(1) TFEU) by partici-pating in a series of agreements and concerted practices aimed at stabilising prices on the plaster-board markets in several Member States. When setting the basic amount of the fine the Commis-sion considered that (1) the infringement was very serious by its nature insofar as it pursued the end of the price war; (2) it had a significant impact on the already highly-concentrated and oligopolistic market; and (3) it had covered major EU markets
such as France, Germany,y the United Kingdom
and the Benelux. For Knauf Gips the starting amount of the fine was set at EUR 52 million, which was then increased by 65% for the long du-ration of the infringement (from 31 March 1992,to 25 November 1998), which brought the final amount of the fine imposed on Knauf Gips to EUR 85,8 million.
The Commission considered the peculiar
struc-ture of the Knauf Group noting that Mr. B
and Mr. C, Knauf Gips high level representatives
were also the managers of Gebrüder Knauf VeVV
r-waltungsgesellschaft KG (Knauf VG), a holding
company, the function of which was to
adminis-ter other companies of the Knauf Group.3While
the Commission’s’ infringement decision was
ad-dressed to Knauf Gips, the turnover taken into
ac-count for calculating the fine acac-counted for the
worldwide turnover of all of the Knauf Group’s’
companies involved in the manufacturing of
plas-terboard.4
Knauf Gips challenged the Commission’s’ decision
before the General Court (GC). The appellant’s’
claim concerned inii tett r alillaii the alleged
infringe-ment of the appellant’s’ rights of defence, the
con-cept of single infringement the principle of equal treatment when determining the amount of the fine and procedural irregularities contrary to the
principle of good administration.5 The appeal
was dismissed by the GC.6
(b) Arguments of the Parties before the ECJ
The appellant contested the GC’s’ finding that
Knauf Gips formed a single economic unit with other companies within the Knauf Group and that it was responsible for the actions of the Knauf Group. Knauf Gips argued that its case differed from the factual situation in Stott rarr ,7the ECJ’s’
judg-ment which set a rebuttable presumption that a 100% shareholding indicates that a parent com-pany is able to exercise a decisive influence over the conduct of a subsidiary. Knauf Gips argued
that the Stot rarr presumption was not applicable
be-cause in the present case the appellant was not
controlled by another company,yy and it did not
hold shares in the companies related to Knauf VG.
Referring to the Baustatt hlgll ewew be case8where the
GC found that there was no economic unit in
case of several minorityt shareholders, the
appellant excluded the possibility of finding joint control by the existence of many shareholders be-longing to Knauf family. Knauf Gips also relied on
Arirr sii trt arr ini where the ECJ found that the simple fact
that the share capital of two separate companies is held by the same person or the same family is in-sufficient, in itself, to establish the existence of an
economic unit.9According to the applicant, the
fact that Mr. B and Mr. C represented both Knauf Gips and Knauf VG could not imply that the com-panies were acting as a single economic unit for the purposes of the EU competition law, contrary
to the GC’s’ judgment.10Thus, by emphasising the
corporate/structural arguments in determining the existence of an economic unit, Knauf Gips
III.1
Alexandr Svetlicinii, Florence*Who is To
T
T Blame? Liability of «Economic Units» for
Infringe-ments of EU Competition Law
(Knauf Gips KG
쐧 European Commission, ECJ (Second Chamber),
Judgment of 1 July 2010, C-407/08 P)
5 5 5 5 5 53
seemed to downplay the behavioural elements, arguing that the fact that the same two share-holders managed all the companies in the Knauf Group and represented them during the period when the infringement was observed should be
ir-relevant.11
According to the Commission, the GC based its finding of an economic unit on a number of
fac-tors including ini tet r alilai that during the
Commis-sion’s’ investigation, Mr. B and Mr. C represented
the whole Knauf Group being the sole interlocu-tors with the Commission and providing the latter with the sales data of all companies in the Knauf Group active on the plasterboard market. The
Commission drew a parallel with Stott rarr showing
that the Knauf Group was managed under
a faff mily contract, which ensured that the
whole group fell under single management.12The
Commission saw no contradiction with the Arirr sii
-tr
t arr ini judgment because Mr. B and Mr. C were managing shareholders who ensured the single
management of the whole group.13
(c) Opinion of the Advocate General
When evaluating the appellant’s’ submission in the
light of the GC’s’ reasoning, Advocate General
Mazaz k noted that (1) «the assessment of whether
a group of companies constitutes an economic unit is not a matter of legal form but requires a
case-by-case analysyy is, close attention being
paid to the specific facts of each individual case»;14
and (2) the GC did not base its finding of an eco-nomic unit in the present case on the basis of iso-lated facts derived from the preceding jurispru-dence.
By way of illustration, the AG noted that in
Bau-statt hlgl eweww be the GC did not base its finding of the
absence of control solely on the numerical per-centage shareholding, so the existence of 22 shareholders within Knauf Group and the
possibil-ity of fluctuating majorities could not, per se,e
pre-clude the GC from finding the existence of the
economic unit.15According to AG Mazazz k the GC’s’
finding was also in accordance with the Arirr sii trt arr ini
judgment where the ECJ held that the simple fact that the share capital of two separate commercial companies is held by the same person or the same family is insufficient in itself to establish that those
companies formed an economic unit.16 The fact
that the appellant volunteered, without being re-quested, to provide the Commission with data not
only in relation to its turnover,r but also the
turnover of all the companies with the Knauf Group was additional evidence for the GC to find that those companies constituted an economic
unit with common interests.17The GC also noted
that Knauf VG was only a holding company, which was managed by the same
individu-als as the appellant, on the same premises and with the same personnel.18At the same
time, among the objectives of the Knauf faff mily
contract, the GC highlighted that Article 1 of
that contract sought to ensure that the companies within the Knauf Group were organised through a single management structure with a common
purpose.19
According to AG Mazaz k, the appellant failed to
demonstrate an error in law on the part of the GC in finding that the companies belonging to the
Knauf family constitute a single economic unit.20
In his opinion, AG Mazazz k did not address in much
detail whether the GC has correctly found that in this particular case the appellant was not acting independently of other companies within the Knauf Group. The AG simply stated that it is set-tled case-law that the anti-competitive conduct of an undertaking can be attributed to another un-dertaking where it has not decided independently upon its own conduct on the market, but carried out the instructions given to it by that other un-dertaking, having regard in particular to the
eco-nomic and legal links between them.21
At the same time AG Mazaz k disagreed with the
GC’s’ statement that Knauf Gips should have been
aware from the Commission’s’ Statement of
Objb ections (SO) that the infringement
con-cerned the whole Knauf Group. Referring to Akzkk o
Nobel, the GC stated that «in such as situation,
the onus was on the appellant to react during the administrative procedure, or be faced with the prospect of no longer being able to do so, by demonstrating that, despite the factors relied on by the Commission, it could not be held liable for the infringement committed by the Knauf
Group».22AG Mazazz k considered that the GC had
erred in law by finding that faff ilure to act
dur-ing the administrative procedure would
preclude the undertaking from doing so before the GC. The mere failure of Knauf Gips to contest a particular position adopted by the Commission in its SO cannot, contended the AG, limit its
rights of defence before the Court thus
denying it the right of access to justice.23
(2) Judgment
The ECJ held that the concept of an
«undertak-ing» in EU competition law «must be understood
as designating an economic unit even if in
law that economic unit consists of sever-al persons, natursever-al or legsever-al».24The existence of
an economic unit, according to the ECJ, could be inferred from a body of evidence, including in the present case the following: (1) the shareholders of Knauf Gips and of the other Knauf companies were the same; (2) two managing shareholders of Knauf Gips, Mr. B and Mr. C., were also the man-aging shareholders of all the companies within the Knauf Group; (3) Knauf VG was merely a holding company without its own staff or premises; (4) the Knauf family contract provided that its purpose was to ensure the single management and direc-tion of the companies in the Knauf Group; (5) the sales figures furnished by Knauf Gips to the Com-mission referred not only to Knauf Gips but to all
the Knauf Group’s’ companies which operated on
the plasterboard market; (6) without being re-quired to do so by the Commission, Knauf Gips sent it the turnovers of the Knauf Group, which
were subsequently used to calculate the fine.25
The ECJ stated that although the legal burden
of proof is borne by the party alleging the
exis-tence of an infringement, «the factual evidence on which a party relies may be of such kind as to require the other party to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof has been
dis-charged».26In relation to the Stot rarr precedent, the
ECJ found that the GC did not rely on that case-law for the conclusion that there was an econom-ic unit. The fact that the subsidiary is not 100% owned by the parent company could not exclude
the possible existence of an economic unit.27On
the basis of the above the ECJ upheld the GC’s’
finding that the companies belonging to Knauf
Group constitute a single economic unit.28
Having confirmed the existence of an economic unit the ECJ examined whether the Commission
was entitled to impute the liabilityt for the
in-fr
ff ingement to Knauf Gips rather than Knauf
VG. Here, the ECJ considered the following: (1) Knauf VG was a holding company with no staff, managing a portfolio of companies for 22 share-holders who were also members of the Knauf family; (2) Knauf VG depended on Knauf Gips for its premises and staff; (3) Knauf Gips was the only Knauf company active on the plasterboard market not managed by Knauf VG; (4) most of the Knauf
Group’s’ documents seized by the Commission
were printed on Knauf Gips’s’ letterhead; (5) Knauf
Gips had the largest turnover among the Knauf companies operating on the plasterboard
mar-ket.29These facts allowed the ECJ to conclude that
Knauf VG did not determine its market conduct
autonomously,y but was dependent in this regard
on Knauf Gips.30According to the ECJ, «the fact
that there is no single legal person at the apex of the Knauf Group (there were three: Knauf Gips, Knauf VG, and Knauf Fiber Glass GmbH) is no ob-stacle to the appellant being held liable for the
ac-tions of that group».31
In relation to the GC’s’ understanding of the
appel-lant’s’ procedural rights of defence, the ECJ
agreed with AG Mazazz k and held that «there is no
requirement under the law of the EU that the addressee of the Statement of Objb ec-tions must challenge its various matters of faf ct or law during the administrative procedure, if it is not to be barred from doing so
later at the stage of judicial proceedings».32A
rul-ing to the contrary would restrict the exercise of a
natural or legal person’s’ right to bring proceedings
before the GC under Article 263(4) TFEU. The Court emphasised that any limitation of the rights to an effective remedy and of access to an impar-tial tribunal guaranteed by Article 47 of the Char-ter of Fundamental Rights of the EU must be
pro-vided for by law.33
(3) Commentary
In its KnKK auf Gipii s judgment the ECJ contributes to
the continuous development of the concepts of
«undertaking», «single economic entity/yy unit» as
well as imputation of liability in EU competition law, which remain highly contested topics. The earlier case-law, when defining a «single
econom-ic entity/yy unit», attributed significant attention to
the autonomy of conduct: «if the undertak-ings form an economic unit within which a sub-sidiary has no real freedom to determine its course
of action on the market»,34«the unified conduct
on the market of the parent company and its sub-sidiaries takes precedence over the formal
separa-tion between those companies».35As summarised
by WiWW sii h in his competition law treatise, «the
cru-cial question is whether parties to an agreement are independent in their decision-making or whether one has sufficient control over the affairs of the other than the latter does not enjoy «real autonomy» in determining its course of action on
the market».36The older ECJ’s’ jurisprudence
sug-gests that in order to impute the infringement to a
parent company,yy the Commission would have to
establish not only that the parent company «was able to exercise decisive influence over the policy of the subsidiaries» but also that it «in fact used this power».37The later cases of Stott rarr and Arirr sii
-tr
tt arr inii established a rebuttable presumption
linked to the majorityt shareholding,
which although insufficient in itself, created prir mi a
fa
influ-5 5 5 5 5 55
ence over a subsidiary’s’ conduct.38Such
presump-tions, however,r would not be applicable in the
cases of non-majority ownership or particular cor-porate forms such as joint ventures. For
exam-ple, in the Rubber ChCC emicac lsll case, the
Commis-sion stated that «in the case of a joint venture, jointly owned by its parents, the joint venture can be presumed to be autonomous from its parent companies» and «to constitute a separate
under-taking».39In another joint venture case, Sodid um
Gluconatett ,40the Commission established liability
of the parent companies based on the factual
cir-cumstances similar to those observed in KnKK auf
Gipii s: (1) all the joint venture executives
simultane-ously held operational responsibilities in the
par-ent companies; (2) JV’s’ supervisory board was
made up of two representatives of each parent
company,yy who were jointly responsible for the JV’s’
management; (3) the JV used the premises of one of the parent companies. Along similar lines, the common personnel and joint supervision of the
50:50 JV in ChCC lororr prerr ne Rubber sufficed to
estab-lish parental liability.41
A general trend traceable through the recent line
of ECJ jurisprudence is the increased flexibilityt
of the criteria taken into account when
es-tablishing a single economic unit and imputing the anti-competitive conduct to particular persons
within such a unit. In the Metstt a case the ECJ
firm-ly stated that «it is settled case-law that anti-com-petitive conduct of an undertaking can be attrib-uted to another undertaking where it has not decided independently upon its own conduct on the market, but carried out, in all materials re-spects, the instructions given to it by that other undertaking, having regard in particular to the
economic and legal links between them».42In its
subsequent Akzkk o Nobel judgment, the ECJ
down-played the importance of conduct by stating that the conduct of subsidiary on the market was not the only factor enabling the liability of the parent company to be established, but was only one of
the signs of the existence of an economic unit.43In
this regard the ECJ was criticised for implying that the attribution of conduct between the parent and subsidiary is always possible where both form
an economic unit.44
The peculiar situation of the Knauf Group with its family contract, non-majority shareholdings, com-mon management and the absence of a single en-tity which would formally control all of the Knauf companies, led the ECJ to further emphasise that the specifics of the corporate structure should not prevent the finding of decisive influence and attri-bution of liability within a single economic unit.
The Court held in that respect that «the legal structure particular to a group of companies, which is characterised by the absence of a single legal person at the apex of that group, is not deci-sive where that structure does not reflect the ef-fective functioning and actual organization of the
group».45Following Akzkk o Nobel, the ECJ
empha-sised that the peculiarities of the corporate
structure of an economic unit are largely irrelevant and the Commission can make
infer-ences based on a «consistent body of evidence» calling for case-by-case assessment. In the words of the ECJ: «account must be taken of all the rele-vant factors relating to the economic, organisa-tional and legal links which exist between it and the company in the same group which is consid-ered to be responsible for the actions of that group, and which may vary from case to case and
cannot therefore be set out in an exhaustive list».46
This case also stands out for the decisiveness with
which the ECJ quashed the GC’s’ judgment in the
part related to the procedural issues in the circum-stances where it was unlikely to change the out-come of the appeal. The ECJ stressed that under the TFEU and the Charter of Fundamental Rights, the parties are not precluded from challenging the
Commission’s’ findings, even if such a challenge
was not raised during the administrative proce-dure. In the absence of an explicit legal basis, such a restriction would be contrary to the
fundamen-tal principles of effective remedyd and access
to justice. Without making any immediate
con-clusions, one might consider the transposition of this approach onto other areas of EU competition law, including its application in the context of a
le-niency programme.47As noted by some
commen-tators, the KnKK auf Gipi s judgment might signal that
the Court will be more willing to consider
the arguments invoking basic rights under
the Charter and the ECHR in competition cases
than was the case in the past.48
* LL.M, MRes, Researcher at the European University Institute. 1 Commission Decision 2005/4// 71/EC of 27 November 2002 relating to proceedings under Article 81 of the EC TrTT eaty against BPB plc, Gebrüder Knauf Westdeutsche Gipswerke KG, Societe Lafarge SA and Gyproc Benelux NV (Case No. COMP/P E-1/37.152 PlPP al stet rbr oardrr )dd , OJ 2005 L 166, p. 8.
2 See also Alexe axx ndrdd Svevv tltt ilcinii iiii, Epilogue of the Plasterboard Litigation: How Much Legal Certainty in the Commission’s’’ Tr
T eatment of Repeated Infringements?, ELR [2010] 318-322.
3 Para. 39 of the Decision. 4 Para. 499 of the Decision.
5 See Agnès Maitrtt err pe ierrr err , Cartel – Access to the file: The Court confirms the limits of access to the file (Knauf Gips), Concurrences [2010] 196-197.
judgment is available in full text in French and German only on the website of the Court of Justice).
7 ECJ [2000] ECR I-9925 Stot rarr KoKK pparbr ergrr sgg Bergrr sgg lal gsg 쐧
Co C
C mmisii sss ion, paras. 28 and 29.
8 GC [1995] ECR II-987 Baustatt hlgl eweww be쐧 CoCC mmisii ss ion. 9 ECJ [2003] ECR I-11005 Arirr sii trtt arr n쐧 CoCC mmisii sss ion. 10 Para 345 of the GC Judgment.
11 Para. 56 of the ECJ Judgment. 12 Para. 349 of the ECJ Judgment. 13 Para 345 of the ECJ Judgment.
14 Opinion of Advocate General Mazazz k of 11 February 2010, C-407/08 P KnKK auf Gipii s쐧 CoCC mmisii sss ion, para. 80.
15 Para. 85 of the Opinion. 16 Para. 86 of the Opinion. 17 Para. 90 of the Opinion. 18 Para. 348 of the GC Judgment. 19 Article 1 «Aim of the contract»:
(1) the aim of the present contract is to maintain the Knauf companies as family companies;
(2) the aim of the present contract is to ensure a single man-agement of the Knauf companies;
(3) the aim of the present contract is to guarantee as single, concentrated exercise of rights in all the Knauf companies; (4) the aim of the present contract is to ensure that the deci-sions necessary for the future management, organization and legal form of the company continue to be possible and cannot be impeded by a single shareholder or a small num-ber of them. (Footnote 64 of the Opinion).
20 Para. 91 of the Opinion.
21 Para. 92 of the Opinion, citing ECJ [2000] ECR I-10065
Metstt a-Serlrr all OyO jyy and othtt ersrr 쐧 CoCC mmisii sss ion, para. 27.
22 Paras. 359-360 of the GC Judgment, referring to GC [2006] ECR II-3389 Akzkk o Nobel and Othtt ersrr 쐧 CoCC mmisii sss ion,
para. 88.
23 Para 96 of the Opinion.
24 Para. 64 of the ECJ Judgment, referring to ECJ [2009] ECR I-8237 Akzkk o Nobel and Othtt ersrr 쐧 CoCC mmisii sss ion, paras. 54
and 55.
25 Paras. 66-71 of the ECJ Judgment.
26 Para. 80 of the ECJ Judgment, referring to ECJ [2004] ECR I-123 Aalbll orgrr PoP rtltt all nd and Othtt ersrr 쐧 CoCC mmisii sss ion, paras. 78
and 79.
27 Para. 82 of the ECJ Judgment. 28 Para. 72 of the ECJ Judgment. 29 Paras. 101-105 of the ECJ Judgment.
30 Para. 106 of the ECJ Judgment. 31 Para. 107 of the ECJ Judgment. 32 Para 89 of the ECJ Judgment. 33 Para. 90 of the ECJ Judgment.
34 ECJ [1974] ECR 1183 CeCC ntrt arr faff rmrr BV and Adndd aan De PeP je pjj er 쐧 Stett rlrr ilnii g Drug Inc, para. 41.
35 CFI [1995] ECR II-117 ViVV hii o Euror pe BV 쐧 CoCC mmisii sss ion, para. 50.
36 Richardr WiWW sii h, Competition Law, 5th edition (2003), pp. 88-89.
37 See WoWW utet r PPP J. WiWW lisll , The undertaking as subject of E.C. competition law and the imputation of infringements to natural or legal persons, 25 E.L.Rev. [2000] 99-116, see also ECJ [1983] ECR 3151 Alllgl meinii e Elektrt irr zii itätt tstt -Geselllsll chaftff AEG-TeTT lefuff nken AG쐧 CoCC mmisii ss ion, para. 50.
38 ECJ [2000] ECR I-9925 Storarr KoK pparbrr ergrr sgg Bergrr sgg lall gsgg AB쐧
Co
C mmisii ss ion, para. 29.
39 Commission Decision of 21 December 2005, Case COMP/P F/38.443 Rubber ChCC emicac lsll , para. 263.
40 Commission Decision of 2 October 2001, Case COMP/P 36.545/F3 Sodid um Gluconatet ; GC [2006] ECR
II-3085 Avevv be쐧 CoCC mmisii sss ion.
41 Commission Decision of 5 December 2007, Case COMP/P 38.629 ChCC lororr prer ne Rubber.
42 ECJ [2000] ECR I-10065 Metstt a Serlrr al OyO jyy and Othtt ersrr 쐧 CoCC
m-misii sss ion, para. 27.
43 ECJ [2009] ECR I-8237 Akzkk o Nobel and Othtt ersrr 쐧 CoC mmisii
-sion, para. 73.
44 See Stett faff n Eini haus, Parent Liability: Collective Responsibility Returns, ELR [2009] 380.
45 Para. 108 of the Judgment.
46 Para. 100 of the ECJ Judgment, see, by analogy,yy ECJ [2009] ECR I-8237 Akzk o Nobel and Othtt ersrr 쐧 CoCC mmisii sss ion,
para. 74.
47 See CyCC ryy irr li SaSS rrrr arr zini , Rights to an effective remedy and to an impartial tribunal: The CJEU upholds the fine while reinforc-ing the rights to an effective remedy and of access to an im-partial tribunal of the undertakings (Knauf Gips), Concur-rences [2010] 101-102.
48 See Antot inii e WiWW nii ckler, Fines: New Case Extending Company Liability in the Name of the ‘Economic Unit’ Concept and Re-versing Prior Case Law on Admissible Arguments, 1 Journal of European Competition Law & Practice [2011] 34-35.
III.2
Ursa Müller,rr Düsseldorf*Access to the file of a national competition authority
(Pfleiderer AG
쐧 Bundeskartellamt, Opinion of Advocate General
Mazák of 16 December 2010, C-360/09)
In thtt isii rerr feff rerr nce foff r a prerr lillmii inii aryr rulilni g tott thtt e Eu-ro
r pean CoCC urt of Justitt ce (E(( CJCC )JJ ,) thtt e Locacc l CoCC urt Bonn (A(( mtstt gs erir cht Bonn, Germr anyn )yy rerr questet d guidadd nce on whww ethtt er thtt ererr isii a rir gi ht of accesss byb an aggrirr evevv d partyt tott a leniencyc applilcac tit on and re
r lall tett d documentstt vovv luntat rirr liyl prorr viv ded byb a le-niencyc applilcacc nt tott thtt e Germrr an competitt tit on
au-th
tt orirr tyt inii ordr er tott prerr pe arerr a civivv lii-lall w actitt on foff r da
d d mages.
(1) Facts and Procedure
In 2008, the German Federal Cartel Office
(Bun-deskak rtett lllall mt)t acting pursuant to, inii tet r alillaii ,
